Will the Internet of Things create jobs in the U.S. or offshore?

Despite an expanding use of electronics in products, the number of people working as electrical engineers in U.S. declined by 10.4% last year.

The decline amounted to a loss of 35,000 jobs and increased the unemployment for electrical engineers from 3.4% in 2012 to 4.8% last year, an unusually high rate of job losses for this occupation.

There are 300,000 people working as electrical engineers, according to U.S. Labor Department data analyzed by the IEEE-USA. In 2002, there were 385,000 electrical engineers in the U.S.

The trend in electrical engineering employment is occurring despite the emergence of the so-called Internet of Things, which promises to put networked electronics into every imaginable consumer and industrial product.

Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology, called the electrical engineering employment trend "truly disturbing.

"Electrical and electronics engineers are at the heart of high technology innovation," Hira said. "Just like America's manufacturing has been hollowed out by offshoring and globalization, it appears that electrical and electronics engineering is heading that way."

But there's more disquieting news in this data.

The number of employed software developers, the largest IT occupation segment, increased by only 1.75%, to 1.1 million, a gain of 19,000. The unemployment rate for developers last year was 2.7%, which is still elevated, according to Hira.

Jobs for computer systems analysts increased by 35,000, to 534,000, an increase of 7%, but Hira said it is the most common H-1B occupation and that nearly all those gains went to H-1B visa holders.

IT hiring increase overall last year, according to labor analysts, but nearly all the increases were in IT services categories and consulting work. These are occupations more closely associated with offshore outsourcing, which may be one of the problems affecting electrical engineering.

For instance, one Labor Department category, management/technical consulting services, saw an increase of 61,700 jobs last year, according to an analysis by Foote Partners, an IT labor research firm.

Citing historical data going back more than 40 years, Hira said, at full employment, electrical and electronics engineers should have an unemployment rate of approximately 1.5%. The current unemployment rate is more than three times that level.

The unemployment rate for electrical engineers exceeded other engineering categories. For mechanical engineers, the unemployment rate was 2.7%, and for civil engineers, 3.4%.

In the computer hardware engineering field, which employs about 90,000, there was a decline of 1,000 jobs from 2012, setting the unemployment rate at 2.7%.

"The fact that these key occupations are faring worse than the average professional is a bad omen for the future of U.S. technological superiority," Hira said. "The widespread offshoring of the semiconductor industry appears to be taking its toll on the job market for American electronics engineers both upstream, in the equipment makers and designers, and downstream in the systems integrators."

Claims of shortages of STEM (science, technology, engineering and math) workers "have no support in fact and no connection to reality, " Hira said. "The NASDAQ is at its record high in more than a decade, only at the height of the dot-com bubble was it higher." adding that hiring for electronics engineers should be booming.